European Markets Finished Mostly Lower After Late Sell-Off

7/23/2013 11:56 AM ET

The majority of the European markets ended Tuesday's session in negative territory. The markets had been up in early trade, but those early gains crumbled in late trading. The early strength was due to Chinese media reports, which cited Premier Li Keqiang as saying the nation will not let GDP growth go below 7 percent this year. Seven percent growth is the bottom line of tolerance, Li was quoted as saying in a recent meeting, triggering expectations that the authorities may intervene if growth slips below this limit.

The decline in UK's government borrowing seen in June was due to temporary factors, and the underlying picture is that of unchanged deficit, Capital Economics UK Economist Martin Beck said.

Capital Economics said that the progress in reducing government debt has almost stalled, and, after removing various temporary factors the fiscal position remains fragile. The debt position indicates that the benefits of the ongoing recovery have yet to feed into the public finances.

According to the firm, achieving a sustainable fiscal position looks like being a long-drawn challenge for the economy, with a recent report from the Office for Budget Responsibility (OBR) showing that the public finances face increasing pressure from an aging population.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.06 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.24 percent.

The DAX of Germany dropped by 0.20 percent and the CAC 40 of France fell by 0.43 percent. The FTSE 100 of the U.K. decreased by 0.18 percent and the SMI of Switzerland lost 0.39 percent.

In Frankfurt, Deutsche Bank fell by 0.37 percent. There were reports that the lender has hired a senior investment banker from UBS AG in Thailand. Shares of Commerzbank rose by 1.34 percent.

In Paris, Vivendi increased by 2.39 percent. The media giant said it has entered into exclusive talks with Emirates Telecommunications Corp. to finalize an agreement for the sale of its 53 percent stake in Maroc Telecom for 4.2 billion euros ($5.54 billion) in cash.

Bouygues climbed by 6.85 percent. The company entered into talks with SFR, Vivendi's French mobile operator, to share networks in France.STMicroelectronics sank by 10.42 percent, after reporting a second quarter loss.

In London, EasyJet dropped by 3.68 percent. HSBC downgraded its rating on the stock to "Neutral" from "Overweight."

Sage Group climbed by 1.76 percent, after stating that third quarter trading was in line with expectations.

Mining stocks were among the best performers Tuesday, due to the news out of China. Anglo American increased by 2.14 percent and BHP Billiton added 1.97 percent. Eurasian Natural Resources climbed by 2.91 percent and Glencore Xstrata gained 5.09 percent. Rio Tinto rose by 3.36 percent and Vedanta Resources advanced by 3.28 percent.

Eurozone consumer confidence in July improved to its highest level since mid-2011, preliminary data released by the European Commission showed on Tuesday. The flash consumer confidence indicator climbed to -17.4 from -18.8 in June. Economists had forecast a score of -18.3.

French business confidence improved for the third successive month in July, and by a larger extent than forecast by economists, latest data showed Tuesday. The business confidence index for the industrial sector rose to 95 in July from 93 in June, statistical office Insee said. Economists had forecast a more moderate rise to 94. The index increased for the third month in a row, but remained below its long-term average.

Spanish recession slowed in the second quarter of 2013, thanks to the improvement in the external sector. Gross domestic product declined 0.1 percent quarter-on-quarter in the three months to June, slower than a 0.5 percent fall seen in the first quarter, preliminary estimates from the Bank of Spain showed on Tuesday.

U.K. mortgage approvals continued its upward trend hitting the highest level since January 2012, as lending schemes initiated to revive credit supply and the property market boosted first-time home buyer demand. Mortgage approvals rose to 37,278 in June from 36,290 in May, the British Bankers' Association said Tuesday. But, the figure was below the 38,300 level forecast by economists.

U.K. exports hit the highest since the recession in the second quarter, boosting hopes of strong recovery, a survey carried out by British Chambers of Commerce and logistics firm DHL showed Tuesday.

The export index that measures the volume of export documents issued to businesses gained 2.85 percent from the first quarter. It was 2.94 percent higher than in the same period of previous year. The activity was the highest since 2007.